FUGAZ, Nigeria’s five biggest banks so named after their initials, gained N1.3 trillion in FX revaluation from their Nigerian operations.
FUGAZ, Nigeria’s five biggest lenders so named after their initials, reaped N1.3 trillion in foreign exchange revaluation gains from their Nigerian operations., beset by an 18-year high inflation rate and the naira at its lowest level ever against the dollar, now confronts a crisis of growth across key industries where banking, unlike most others, is virtually taking a smooth ride through the storm.
That is not to mention similar gains reported by other banks listed on the Nigerian Exchange and some other lenders that are not publicly listed. As monetary policy clears the path for lenders to turn the prolonged hawkish stance and the naira devaluation into their advantage, it has heightened the pang for borrowers and, by twist, triggered a boomerang for those banks who are now seeing a steady spike in impairment charges from loan default.
Guaranty Trust Holding Company , worst-hit by poor loan quality in percentage times, saw its impairment charge balloon almost 24 times.“Loan impairment charges increased significantly in 1H23 due to the weaker macroeconomic setting and the increased provisions needed for FC loans, but they were comfortably absorbed by the FX revaluation gains,” Fitch
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